Top Reasons Startups Die

Growing your business from a startup into a scale-up is an arduous process. Growing pains are inescapable once you start to scale, even the most experienced CEO will admit to this. One of the main reasons that most (as much as 70%) startups fail is trying to scale prematurely. Following the flow from growth to scale to profit is incredibly important.

Here are some of the top reasons startups fail and why working with an interim Chief Growth Officer might be just what you need.?

Trying to be everything to everybody?

Don’t try to boil the ocean! This is a mistake that many startups make when they are starting out. They make the mistake of trying to accommodate every request made by every customer.

How do you find your perfect customer along with defining how you will go to market?

2 options:

Option 1) involves seemingly endless planning, strategizing, and debating to deliver a regimented plan around who, what, how, where you’ll acquire leads and takes 60-90+ days.

Option 2) is turning what you [think you] know into hypotheses transformed into fail-fast, data-led experiments and fast pivots (iterations) to pin how, where, and who is your perfect customer with launch in 15-30 days and another 15-30 days to validate.

Taking the time to complete a detailed strategy and identify your perfect customer “could” shorten your sales cycle (traditional method is full of guesswork) Taking a fail-fast approach will shorten sales cycles and produce qualified leads again and again (and again because you should never stop experiencing)

The ROI on this step is worth every penny.Skip it, and you run the risk of overpromising and underdelivering.

It’s imperative that you focus on the one thing you do better than everyone else before you start adding new things. What’s your go-to-market strategy? This term is something that sends a lot of CEOs running. It seems like something that is time and money invested in something that isn’t immediately tangible.

However, a good go-to-market will ensure that you are going forward in the right direction. Not sure how to create a great go-to-market? That’s where an experienced CGO comes in.?

Trying to scale up too quickly

A very common mistake that many startups make is that they try to scale up prematurely. They get one or two clients and think they have proven their market fit. It’s exciting! And understandable, however, it’s extremely important to validate your business model.

Gaining traction in the main market is the next step. Quite often those first few customers you have are early adopters who like trying new things. The trick is getting to the majority. The gap between these two very different markets can often be difficult to navigate.

Geoffrey Moore wrote a good book about this experience, called Crossing the Chasm. He points out that most startups in this situation need to realize that the same marketing that attracted their initial early adopters isn’t suitable to bring in the early majority.

And not to beat a dead horse, but, the value proposition needs to be revisited at this time as well. This is another example of where an experienced CGO will help you move your startup to the next level.?

Not having a scalable infrastructure?

As your startup grows it needs to be systematically set up for scale. This is the point where you need to automate and optimize. Your people, systems, and processes have to be aligned. Having all of this information streamlined will keep you informed about when to iterate allowing you to keep pace and make optimal use of your company's momentum.

As we all know, unforeseen situations happen all the time. Change is the only constant in a startup, and being able to change quickly by making small incremental changes keeps you from becoming paralyzed. Having the right infrastructure and communication in place will help you be able to iterate quickly and stay agile.

Having everyone on the same page and knowing how to optimize customer touch points along the way such as direct outreach, social media, blogs, and playbooks will allow you to shorten the sales cycle and elongate the customer lifetime.

One thing that will allow you to do this is automation leading to growth in your top line and a more efficient bottom line which inevitably leads to more profit.?

Hiring prematurely?

This is a big one. A lot of startups make the mistake in their first period of significant growth of hiring people prematurely, especially for higher-paid positions like CEO, CMO, or CRO. They feel desperate for extra manpower to cope with the higher demand.

This is where hiring a fractional CGO with exceptional skills is a smart play. Fractional executives are highly experienced and can prove to be very valuable assets. Since they have experience with successful companies, they know what you need to do for the growth of your company.

Hiring a fractional CGO can help you come up with a well-considered strategy, reviewing all of the details of your business and doing in-depth market research allowing you to create a plan of action.

Having a strategic approach is very important to accomplish the goals you have set and emerge successful. It’s all of the experience at a fraction of the cost. This gives you the ability to work through your growing pains utilizing exceptional experience while slowly building a team that fits your culture, pushing your best employees harder and treating them better, keeping your business on track.

Fractional executives may not stay with your company for long, but they leave you with long-term benefits. The job of a good CGO is to work themselves out of a job.?

Want to learn more about why startups die and how to save yours? Brilliantly is a growth firm of interim and fractional CGOs positioning?#InsureTech ?and?#FinTech ?startups for A-Round by increasing top-line revenues and driving bottom-line efficiencies. You can find out more about?Brilliantly ?or on the web at?https://brilliantlysaas.com/